WTF Is Growth Hacking

Growth hacking sounds more like an illegal activity invented by a bunch of coders than a marketing practice. However, it is rapidly becoming a hot topic that start-ups and many businesses want to understand.

You may have recently seen posts about growth hacking and in particular people linking it to content marketing.

Is growth hacking just a set of tactics applies only to start-ups can use or can established businesses successfully adopt these methods to boost their performance?

#1 – What Is Growth Hacking

The phrase “growth hacker” was coined by Sean Ellis in 2010. Sean Ellis has a reputation for growth, for delivering growth, not just once but multiple times across a series of start-ups: Xobni, Dropbox, Eventbrite and others. In 2010 he wrote his famous blog article Find a Growth Hacker for Your Startup. The rest as they say is history.

Although many marketers argue that they do the same thing as Sean Ellis and other growth hackers, the focus is different and the results demonstrate it. It is not to say marketers can’t though adopt the principles of growth hackers, but clearly it is not marketing as usual. The challenge for many marketers is in knowing what to change – how does growth hacking differ, what are the methods and tools.

Organizations themselves are not traditional breeding grounds for entrepreneurs and innovation. Start-ups are by their nature fighting for survival and therein lies a sense of urgency, passion and drive that many organisations do not have. The first difference is in the mindset, the absolute need to win.

The first thing to say about growth hacking is that like many other forms of hacking the goal is to achieve more with less. More thought in this case means meteoric success, smashing the competition and achieving the sort of growth that most companies only dream about.

Hacking is a term we all associate with computer coders. Quite simply hackers are people that understand how systems work, dismantle them and then creatively put a new system in place that is faster and more effective. In the case of computer hackers, they heavily modify software or hardware to create an effective solution to a computing problem.

Computer hackers are known for their ingenuity in using code to do things that whole IT departments seem to take months to do. Their solutions are direct and effective.

So if you apply these principles to business, in particular start-ups, you can understand the attraction of fast growth using strategies and tactics that do not require an army of employees or masses of money.

Whilst there are some definitions around what a hack is, Wikipedia, the term is loosely applied to a whole range of uses. Some notable hacking websites on hacking (outside of computing) include Lifehacker, Language hacker (Fluent in 3 Months), the travel hacker (Nomadic Matt) and the famous Tim Ferris (notable business and life hacker).

#2 – The Core Principles of Growth Hacking

There are two elements to this:

Growth hacking framework

The skills and characteristics of the growth hacker

The Growth Hacking Framework

Growth hacking strategies have been responsible for generating billions of dollars of revenue. These strategies have been distilled and are being used to fuel new companies like Qualaroo, Evernote and countless other startups. So what makes a good growth hacker? and do they do it?

But what do they do and how do they do it? The start point is to to look at the different stages of a start-up and understand their focus. What do they get right and how. The growth pyramid, used by Sean Ellis, that can be used to break growth hacking into three distinct stages.

Growth Hacking Framework

Product/Market Fit

Perhaps the biggest and most fundamental start point for growth hacking is to get the right fit between the product and the customer. The first principle of marketing is to base a product on the needs of the customer. Most marketers have the luxury of an established customer base, some history of previous campaigns and data to they can work with. So the first thing startups have to do is to make sure is that the market wants the product: ideally that they must have it. A difference then is that businesses need to rethink their product / market fit. Many may think it is good, but could it be better!

So how can you test this out?. Well one of the most powerful mechanisms any business has is customer feedback. This could be observing them buy, understanding heatspots on websites or simply using exit / entry surveys on the website. Sean Ellis used a simple questionnaire to test the market/product fit by asking one question:

How would you feel if you could no longer use [product/service]?

He also then looked at usage and other data to support the answers. As Josh Elman, a former growth hacker at Twitter says “Growth hacking recognizes that when you focus on understanding your users and how they discover and adopt your products, you can build features that help you acquire and retain more users, rather than just spending marketing dollars.”

The goal of getting the product/ market fit right is that the product itself is becomes desirable, a must have and quickly creates evangelists that spread the word.

Growth hackers focus on this “Product Market Fit.” They are involved in the design of the user experience not just the marketing of it.

Without the right product / market fit there is no second stage.

Transition To Growth

After the first stage of getting user the growth hacking really begins. The first principle is to fully understand why people love the product and to use that to build on the messages and marketing. There are two sides to this stage: left brain and right brain view.

The left brain or logical side is about engineering the growth, understanding the users, surveys and studies to hone in on the core reason they love the product and building this into the communications. It is about data, data and more data – testing reasons for drop offs, experimenting – A/B testing, reducing friction to sign-ups. This is the engineer, building and refining the product, user experience and marketing by continually asking questions – lots of them.

The right brain approach: there is no doubt that that great creative not engages users but can deliver the ‘cut through’ ideas that can take a product viral. The earliest example is by Tim Draper of hotmail, who pushed the founders to add “PS I Love You. Get Free Email” to the bottom of every email. The result? One million users within six months and 10 million after just one year.

They key point is that it isn’t just about spending market dollars, high growth comes a deep understanding of the customer, continual analysis and thinking creatively. The aim of the growth stage is to gain masses of users by referrals. The result is that the user base expands exponentially as 2 becomes 4 becomes 8 and 8 becomes 16 and so on.

Growth

The last part is managing the infrastructure and building it out to maintain the quality of the product, further develop it whilst scaling the business. Growth comes from holding on to customers not just getting new ones. So good customer service matters and that has to scale as the business scales.

Each company in this respect is different, but the core focus is on retaining customers, building the community online, cross-selling new products and growing the user base. This involves the full armoury of a multi-channel approach.

Another useful model that I have found which places a more formal structure to growth hacking is by Donald Donckers

Growth Hackers Skills and Characteristics

“Growth hackers are a hybrid of marketer and coder, one who looks at the traditional question of “How do I get customers for my product?” and answers with A/B tests, landing pages, viral factor, email deliverability, and Open Graph.”

The growth hacker has to have a high level of self-motivation and an innate curiosity about how things work. These are people that want to dive into the data and understand things. Technically whilst they needn’t be a coder, they need to be technically fluent in web technology. The core skill though is analytics, which allows growth hackers to hone in on finding and repeating the things that work and eliminating what doesn’t.

The pace at which a start-up must change to achieve success puts pressure on everybody. A growth hacker has to be tenacious, obsessive and able to withstand the knocks, not just the highs. To be a growth hacker you have to get a basic thrill from solving problems, sharpening your skills, and exercising your intelligence.

#3 – Growth Hacking Examples

The thing to remember is that 1 in 3 start-ups fail. So these examples are the ones that not only beat the odds but did it spectacularly.

Example 1 – AirBnB

AirBnB is a website that allows people to rent out their home or rooms. It has over 500,000 listings in 33,000 cities and 192 countries. It was founded in August 2008 by Brian Chesky, Joe Gebbia and later Nathan Blecharczyk.

Their defining growth hacking tactic – Airbnb’s growth took off when they integrating their platform with Craigslist. This enabled them to get merely of people signing up quickly.

Example 2 – DropBox

Dropbox is a cloud-based file hosting and sharing service that was founded in 2007 by Drew Houston and Arash Ferdowsi. It now has over millions of users worldwide.

Their defining growth hacking tactic – DropBox incentivised users to invite their friends to signup by providing 2GB of extra storage for every invited friend that signed up. The result was millions of new paying users.

Example 3 – PayPal

PayPal is the e-commerce business platform that provides payments and money services.

Their defining growth hacking tactic – PayPal used incentives in its approach, offering a reward of $10 to each new customer and the person who referred them. This simple but effective tactic saw PayPal explode to millions of users before eventually pulling the offer.

Example 3 – Groupon

Groupon, which launched in November 2008, is a deal-of-the-day website that offers discounted gift certificates usable at local or national companies.

Their defining growth hacking tactic – they used a number of mechanisms, but for virality, they offered people $10 worth of deal vouchers by referring a friend sound familiar!

Example 4 – GMail

GMail was launched as a beta product on April 1, 2004.

Their defining growth hacking tactic – at the time of launch Google had a compelling difference to competitors. They offered 1 GB per user, compared to Hotmail that offered 2 to 4 MB. But the tactic that worked so well for Google was exclusivity. They made early adopters feel like they were an internet VIP, friends and family were hounding for an invite. Needless to say that it worked and they repeated this same tactic for the launch of Google Plus.

Example 5 – Twitter

Twitter was launched in July 2006 by Jack Dorsey, Evan Williams, Biz Stone and Noah Glass and by July 2006.

Their defining growth hacking tactic – identified that any person with more than 30 people was more likely to become an active user. They used this to then highlight suggested people to follow upon signing up.

Example 6 – Clinkle

Clinkle was a mobile payments company which was founded by Lucas Duplan in 2011. The company started as a small group of students. In 2013 it raised $25 million in what became Silicon Valley’s largest seed round.

Their defining growth hacking tactic – the Clinkle website was simple with the sole purpose of capturing your email address. Clinkle showed new users how many people were ahead of them in a waiting list and then prompted them to jump the queue, by performing a range of simple tasks e.g. sharing on social media channels.

Example 7 – Pinterest

Pinterest is a social bookmarking site where users collect and share photos of their, events, interests and hobbies.

Their defining growth hacking tactic – made use of ‘infinite’ scrolling to keep users hooked on the platform. By removing the need to browse through pages they delivered visual content on tap. People had less friction to stay on the site, fewer distractions and much more chance that they would share what they found.

Example 8 – Mint

Mint.com allows users to track bank, credit card, investment, and loan transactions and balances through a single user interface as well as make budgets and goals.

Their defining growth hacking tactic – Mint changed the personal finance world by producing a blog that spoke to young professionals who didn’t to connected to yet another finance website. The use of infographics and popular articles made their way to websites like Reddit and Digg.

#4 – Growth Hacking Tools

#5 – Growth Hacking Tactics

If you take the examples used across the internet most references are to well-known Software as a Service platform (Saas). There are few case studies about other types of business. The world is full of entrepreneurs yet only a few get the attention of the media. Clearly, growth hackers exist in other markets but these have not caught the eye of the media.

Developing growth hacking strategies will depend on the nature of the product you are selling. That said there are lots of ways to creative ways to maximise website traffic, develop viral campaigns, improve conversions and generate revenue. Growth hacking tactics are in effect good practice marketing, but growth hackers refine them concurrently to orchestrate a funnel that maximizes growth and therein lies the difference.

Growth Hacking is a mindset. Growth hacking is a combination of psychology (understanding customer behaviour), technology and creative thinking. The question though arises can other businesses harness growth hacking strategies and tactics for growth?

The biggest shift to make is in these three areas:

Understanding the customer – few business conduct surveys regularly and when they do it is more of a benchmarking exercise than a real dive into who their customers are, why they use their products, how they use them, who else they use, what there experiences are…

Analysis – getting into the data and understanding each section of the marketing and sales process with the right metrics. Then suing these to experiment, optimise and repeat.

Growth Hacking Tactics

These are some of the growth hacking tactics I have picked out that can help improve your overall marketing.

The Customer Experience

– Assuming you have got a great product or service that customers must have and you know it is set for success then you are into building the growth engine. Growth Hackers continually emphasize the simplicity of the user experience throughout the acquisition process. So from the moment they arrive at your site they identify with the site it talks their language, has a clear value proposition and tells them what to call (good call to actions), choices are simplified (generally no more than 2) and the copy sells the product. Whilst that sounds simple each aspect needs to be developed, tested and refined.

Mapping the customer experience then leads to understanding the process and identifying the key metrics that you can then attribute to each part. Once you set the measures and start looking into the data you can join the dots so that you can see for instance drop off rates by any particular source (i.e. customer behaviour differences, ad performance, social network performance…). Once you have the data you can spot the gaps and start looking for optimisation from initial brand awareness/reach through to final sign-ups.

What’s In It For Me

– If you want to get others to share your content/your service or product then yes some will do it because they are love you but that doesn’t deliver massive growth. You need to think of ways that give people an incentive to share. Experts on viral marketing – Jonah Berger, Robert Cialdini, Karen Nelson Feld, Karin Nohan and David Meerman Scott; will inform you that emotions drive sharing more than anything logical. Equally important is to tap into their driving motivations, values and passions. This enables you to develop cut through insights that combined with the creative earlier will drive virality.

Agile Marketing

The concept of setting up a lean start-up with a minimal viable product (MVP) was first introduced by Eric Ries. Agile marketing has since built on this combining the ideas taken from agile software development. Strategies remain fluid and flexible, tactics change according to the campaigns and data.

Moving quickly, responding to data and have a quick turnaround for changes are essential for accelerated growth. This is the mind shift change.

Social Focus

As Oscar Wilde once said:

There is only one thing worse than being talked about and that is not being talked about

The methods then for gaining exposure are: blogging (including guest blogging), interviews, publicity stunts (think Ryan Air), Run contests, find and harness influencers, use affiliates, refer a friend schemes, build partnerships, work with others on total solutions, tell the press about your people and company news…

Orchestrating brand exposure will turn ripples into waves.

#6 – Growth Hacking Resources

Growth hacking is gaining popularity and there are already lots of great resources to find out more about it. I have listed below some growth hacking for you to explore and would welcome any more in the comments section – so please share with others.

Growth Hacking Course

This course is produced by the founder of Udemy which in itself is a remarkable growth hacking case study. Why not learn from the best.

Growth Hacking Blogs and Bloggers

Andrew Chen has a blog which is loaded with great content about growth hacking from product/market fit to mindset to thoughts on how growth hacking can be applied.

Sean Ellis, who is Founder and CEO of Qualaroo and Growth Hackers (see below) also manages to write about growth hacking. His blog titled Startup Marketing is an excellent growth hacking resource and he gives thoughts and insights from his own experience.

Lincon Murphy has a history in a good way. He has worked across a lot of SaaS businesses helping them accelerate their growth. His blog is full of great advice and helpful tips.

Caneel Joyce post is an excellent way to get some top notes taken from the 2012 Growth Hacking Conference. They capture lots of helpful thoughts from key speakers as well as their tips and Caneels own take on them as well. Well worth a look.

Growth Hacker TV is a dedicated channel to growth hacking and has a big library of resources that you can tap into. It contains interviews with some of the best growth hackers around and they openly give you their top tips and advice on how to use growth hacking.

Growth Hackers is a website/community of people and posts about growth hacking. It has some good and varied content on the site.

The growth hacking presentations I have included below will give you a lot more background information. I have also included some growth hacking examples as well as some books that you can read about growth hacking.

So now I hope you have a better idea as to WTF is growth hacking and how to growth hack your business. I am sure there is a long way to go with growth hacking so if you find anything else let me know, add it in the comments and also let me know what you think. Is growth hacking over-hyped marketing or a true discipline?